HUD investigates ex-Michigan housing chief over misuse of funds

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The FHA 203k loan program provides home buyers the opportunity to buy and fix up a property, without exhausting their personal savings.

A political scandal is brewing over the misuse of $1 million in government funds to a private real estate company.

The Office of Inspector General of HUD is investigating a complaint filed by the Michigan Democrats that alleges a potential conflict of interest or misuse of federal funds by the previous head of Michigan’s housing agency.

News of the probe comes two months after Scott Woosley stepped down as housing chief in response to a state Democratic Party public records request that showed he stayed in pricey hotels and expensed large dinner bills.

The compliant also said Woosley’s private real estate investment company, Labor-Management Fund Advisors, was continuing to get paid by the state housing authority while he served as agency director, according to The Detroit News.

The Detroit newspaper also reported that records showed Labor-Management received more than $1 million from a $98 million HUD grant the Michigan State Housing Development Authority received in 2008 for its Neighborhood Stabilization Program.

Woosley previously said he continued to share in profits of Labor-Management Fund Advisors while collecting a $135,000-a-year paycheck.

The Democratic Party requested the federal probe on Sept. 18, and the Michigan State Housing Development Authority confirmed Sunday that HUD has launched an investigation into the complaint.

COMMENTS

by | 10/21/2014 11:40:43 AM

Only a Million? Probably 5 times that. not to worry though, while little brokers are serving time in prison for writing no doc/stated mortgages this government crook will serve notime and at worst retire with a nice pension.

by Griff| 10/21/2014 7:42:11 PM

Really? When are the losers in Washington going to figure out that all the costly rules will do nothing to deter fraud. You are either honest or you are not. If you are not you will be this guy who saw an opportunity and took it. Oh, and let's see, he was not a mortgage broker. . It just points up how much crime there is. Good thing they are focusing on taking the handful of brokers out at the expense of the consumer.

When I wait 8 weeks for an appraisal that is simply usable because of lousy AMC's and can't give money back to a client because the lousy AMC screwed up it is clear the intention is not to protect consumers, but the banks who own the AMC's.